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General Motors partners with battery supplier LG on electric vehicles

General Motors said Thursday that it is partnering with its battery cell supplier, LG Group, to develop electric vehicles.

The agreement, signed Wednesday by GM CEO Dan Akerson and LG President Juno Cho, will “help GM expand the number and types of electric vehicles it makes and sells,” the automaker said in a statement.

It's the second example this week of automakers looking for partners to help in developing more fuel-efficient cars, as U.S. regulators put in place stricter fuel-economy standards for later this decade. On Monday, Toyota Motor Corp. and Ford Motor Co. said they are partnering to develop hybrids for pickups and SUVs.

The pact with GM broadens opportunities for LG, which supplies battery cells for the Chevrolet Volt plug-in hybrid.

Akerson has vowed to stay ahead of the competition on vehicle electrification. He's pressing his team to reduce the cost of the Volt, partly through economies of scale by applying the technology across more GM vehicles. Earlier this month, GM said the Volt powertrain will be put on an upcoming Cadillac sedan.

The Volt's success prompted GM and LG to collaborate further on vehicle electrification, leading to a formal alliance, GM said.

Last year, for example, the two companies worked together to develop a demonstration fleet of electric Chevy Cruze compacts, which were used as official vehicles during the G20 summit in Seoul. In its statement Thursday, GM said it now is “market testing” those vehicles.

GM and LG engineers will work together on development of electric vehicle platforms and components, GM said. Vehicles born out of the partnership “will be sold in many countries,” the automaker said.

Steve Girsky, GM vice chairman, said in the statement: “Consumers benefit by getting the latest fuel-saving technology faster if we work with the best suppliers and we save time and money in the development process.”

In the statement, Cho said, “We fully support GM's goal to lead the industry in the electrification of the automobile.”

GM didn't disclose terms of the agreement but said it does not involve any exchange of equity.